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As part of the settlement, the company also agreed not to bid on or provide work under any D.C. government contracts for one year.
WASHINGTON — A construction company operating out of Washington, D.C. owes the District money after trying to cheat its employees out of sick leave and other employment benefits to which they were legally owed, according to the Attorney General's Office.
Authorities say Maryland Applicators intentionally misclassified employees as independent contractors to avoid having to provide them with the proper sick leave and other employment benefits. Now, the company must pay $835,000 to the District.
As part of the settlement, the company also agreed not to bid on or provide work under any D.C. government contracts for one year, D.C. Attorney General Brian Schwalb said.
“Maryland Applicators denied District workers the sick leave and other employment benefits they had earned by misclassifying them as independent contractors rather than employees. This not only cheated the workers but gave Maryland Applicators an unfair advantage over their competitors who follow the law,” Schwalb said. “My office is committed to protecting District workers, ensuring they receive the wages and benefits they are legally owed, and leveling the playing field for all law-abiding District businesses.”
Maryland Applicators is a Maryland corporation that provides construction services on projects in Washington, D.C.
Authorities claim it employed dozens of misclassified workers and also secured the services of hundreds of additional misclassified workers through subcontracts with other companies.
The misclassification is as a form of wage theft that reduces costs for companies at the expense of employees, Schwalb said.
Authorities say misclassifying employees as independent contractors deprives them of rights that employees are entitled to, such as the minimum wage, overtime compensation, and paid sick leave.
Illegal misclassification also deprives the District of tax revenue, unemployment insurance premiums, and workers compensation contributions.
D.C. construction companies that misclassify workers unlawfully avoid at least 16.7% in labor costs compared to companies following the law, providing an unfair advantage over their competition.
As a result of the settlement, Maryland Applicators must:
- Pay $835,000 divided as follows:
- $489,000 will be paid to the District.
- $346,000 will be paid to affected workers.
- Change its practices to ensure that all workers hired for projects in the District are properly classified in compliance with District law and receive the wages and benefits they are legally owed.
- Refrain from bidding on or providing work on contracts paid by the District government in the District for one year.
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